Japan yesterday nearly doubled its economic growth forecast, as it adopted a long-term overhaul designed to slash the highest levels of debt in the industrialized world.
The Cabinet Office said it expects the economy to grow about 2.6 percent for the year to March next year, from an earlier projection of 1.4 percent.
That would see Japan achieve expansion of more than 2 percent for the first time since 2006, it said. For the fiscal year to March 2012, the government forecast 2 percent growth.
“Thanks to the government’s stimulus packages, strengthening in business profitability and improvements in employment and household income are spreading to an increase in private demand,” the Cabinet Office said.
“If this cycle continues, Japan’s economy is expected to go on a track towards an autonomous recovery,” it said in a twice-yearly report.
However, it warned that “continuing efforts to tackle deflation are necessary,” with the overall consumer price index not expected to stop falling before the next fiscal year. Prices in this fiscal are expected to drop 0.9 percent.
The relatively positive outlook comes as booming overseas demand for cars, high-tech products and factory parts combine with a stimulus-driven domestic picture, raising hopes Japan may eventually see a self-sustaining recovery.
A fourth straight quarter of expansion saw GDP in the January-March period grow at an annualized 5 percent.
Separately, the government unveiled a long-term fiscal management policy that aims to achieve a primary balance surplus in fiscal 2020 in a bid to avoid a Greece-style debt crisis.
Achieving surplus in the primary balance — the budgetary balance excluding debt servicing costs and revenue from bond issuance — is key to efforts to eventually curb government debt.
Japan’s primary balance in this fiscal year is expected to show a loss of ¥30.8 trillion (US$338 billion).
Japanese Prime Minister Naoto Kan pledged earlier this month an ambitious overhaul to reduce the country’s massive public debt, which at about 200 percent of GDP is the highest level of any industrialized nation.
Under the latest policy, the government will set the cap on new government bond issuance in the next fiscal year below ¥44 trillion, the level planned for the current year from April.
In the next three years to fiscal 2013, the government plans to cap budget spending below about ¥71 trillion, the level also planned for the current fiscal year from April.
“I’m confident we can win the confidence of the markets” with this plan, economy and consumer affairs minister Satoshi Arai said.
“I want to be clear that our country is in a different situation to Greece and Hungary,” Arai said, citing Japan’s current account surplus and large financial assets.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS